Ukraine uses Gazprom dispute in bid to scupper Nord Stream 2 pipeline

Ukrainian President Petro Poroshenko has once again urged European policymakers to scrap plans for the Nord Stream 2 gas pipeline, which would bypass Ukraine and deprive it of transit fees.

He told EU officials that the Russian energy monopoly Gazprom was an unreliable partner for Europe. According to Poroshenko, the European Union and Ukraine should boost cooperation to increase their energy security.

“Ukraine once again appealed to the European Commission, the EU member states, to abandon intentions to build the Nord Stream 2, as the project compromises the energy security of Ukraine and the EU,” he said at a joint briefing with the EU’s diplomatic chief, Federica Mogherini.

The appeal came after Gazprom canceled its supply-and-transit contracts with Ukraine’s state-run energy firm Naftogaz following a legal decision against the Russian company. Earlier, Stockholm Arbitration ordered Naftogaz to pay Gazprom $2 billion, while ordering the Russian company to compensate Naftogaz to the tune of $4.67 billion

The contract for the supply of natural gas from Russia to Ukraine, signed in early 2009, was set to expire by the end of 2019. Under the terms of the agreement, Ukraine was to buy 40 billion cubic meters of gas a year with the annual volume increasing to 52 billion cubic meters from 2010. However, Naftogaz opted to stop buying the contracted volume in November 2015, replacing it with reverse gas supplies from European countries. The step was seen as a breach of contract.

Kiev has repeatedly expressed concerns over Nord Stream 2 because the pipeline threatens to cut gas transit through Ukraine. The infrastructure will deliver gas directly to Germany under the Baltic Sea, and aims to double the existing pipeline's capacity of 55 billion cubic meters per year.